BMW has announced that it is on track to meet its full-year targets following an increase in earnings margin and revenue in its automotive segment. While facing the challenge of higher raw material costs, the German car maker reported a rise in earnings before interest and taxes (EBIT) to EUR3.135 billion ($3.33 billion), representing a 9.1% increase compared to the previous year. The EBIT margin for the automotive segment also showed improvement, reaching 9.8% compared to 8.9% in the previous year.
Despite facing a EUR4 million setback from the motorcycles division due to changes in the model launch calendar, the overall EBIT for the group rose to EUR4.35 billion from EUR3.68 billion. The company's revenue also experienced growth, reaching EUR38.46 billion from EUR37.18 billion. According to FactSet estimates, analysts had expected revenue to be EUR37.42 billion.
BMW highlighted that the successful integration of the joint venture with BMW Brilliance Automotive played a significant role in improving the bottom line. Increased sales volumes and positive product mix effects also contributed to the positive results, although currency effects had a slight dampening effect.
After-tax profit declined to EUR2.93 billion from EUR3.175 billion in the prior year, but surpassed analyst estimates of EUR2.60 billion. BMW attributed a EUR289 million hit to interest-rate hedging transactions.
Despite challenges posed by a volatile business environment, BMW's Chief Executive Officer Oliver Zipse remained optimistic about the company's course for profitable growth. The car maker has backed its guidance, including an EBIT margin between 9% and 10.5% for the automotive segment, and aims for battery-electric vehicles to comprise 15% of sales this year.
According to Chief Financial Officer Walter Mertl, BMW expects a positive business development in the fourth quarter, with all segments striving to meet the company's goals for the year.